Yves here. I don’t pretend to have answers to the problem of aged affordable apartments becoming financial sinkholes by (among other reasons) encountering pro-tenant policies that make it take a long time to evict non-payers and re-rent vacant spaces. But keep in mind that THE CITY is very much oriented towards the issues of ordinary New Yorkers, covering abuses at Rikers, by ICE, and organizing by deliveristas. The landlord at the center of this account is trying to make the equation of affordable housing work and is coming up against a wall.
Some of these issues are particular to New York City, but are also ones Mamdani will have to contend with in his broader push to get rental costs down. More apartments designed for middle and lower income renters is the only viable longer-term fix. But getting that going takes time, and more than one mayoral term to have any impact.
By Greg David. Originally published at THE CITY on November 19, 2025
BronxProGroup manages 93 subsidized apartment buildings containing more than 3,300 affordable apartments, mostly in The Bronx.
One in three units are in buildings where this year expenses are greater than the rents collected. And one in five are in buildings in such poor financial shape that the owners will have to resort to renegotiate their loans to lower their risk of defaulting.
CEO Samantha Magistro, who joined the family-owned firm about 25 years ago, says half of the units are in buildings that no longer can make any payments to their owners.
The business of running this kind of housing, increasingly, isn’t a viable one.
These buildings are not only rent regulated, but were also built with requirements that the apartments be leased at very low rents to people with very specific low incomes. Since the pandemic, their costs have risen a lot, their rent increases have lagged badly, and rent collections have slipped. Owners and managers say Mayor-elect Zohran Mamdan’s promise of an at least four-year rent freeze will make their situation worse.
“My father, who founded the company’s parent decades ago, would tell you things were worse in the 1970s,” the 43-year-old said, when areas of the Bronx saw widespread arson and abandonment. “But for my generation this is the hardest it has ever been.”
Magistro’s story is being repeated throughout New York City in this crucial sector of the city’s housing stock, according to two new reports on the all-affordable housing sector released last month, estimated to include about 300,000 units.
For the tenants in those buildings, this is the only housing they can afford. Without some change in course, possible future scenarios are grim: If housing stock deteriorates, or buildings are abandoned by owners, or investors are unwilling to put their money into affordable housing because the numbers don’t add up, the city’s affordability crisis will get even worse.
“What our report demonstrated is that financial strain in our affordable housing stock is not limited to a few owners, or specific geographies, or building types,” said Patrick Boyle, senior policy director at Enterprise Community Partners, an organization that helps arrange housing financing and works with BronxProGroup. “It’s widespread, and as advocates and policymakers, we urgently need to turn our attention to preservation.”
The search is on for solutions.
“There is no one easy fix,” Boyle added. “Increasing resources like rental assistance, reducing regulatory barriers and tackling expenses head-on will all be required.”
These all-affordable projects are built under agreements with either the city or state that dictate who can rent the units by income. Most are financed in part by low income housing tax credits. Industry experts estimate that about half are built and run by non-profits and the other half by for-profit developers like BronxProGroup, which specialize in this area.
Many of them rely on other forms of subsidy like federal or city vouchers to make their numbers work. Those programs tie rents to a fraction of the household incomes of tenants and pay property owners the difference.
About six in 10 affordable projects that have received financing help from Enterprise and the National Equity Fund have expenses that exceed their income, according to a report the group issued last month. Those projects have seen their expenses increase 40% since 2017, far more than the increases in rents allowed by the city’s Rent Guidelines Board, which sets rent levels for regulated apartments.
The Association for Neighborhood and Housing Development, a coalition of community groups including nonprofit affordable housing organizations, found that about half of the all-affordable buildings it studied — containing 112,000 apartments — are losing money.
Previously, discussion of the plight of landlords has centered on owners of older buildings whose units are almost entirely rent regulated and whose finances have been badly hurt by 2019 changes in the rent laws. A key change effectively ended the ability of landlords to renovate vacant apartments and then charge a much higher rent, which helped them keep up with cost increases even when regulated rent increases for existing tenants were zero. (Rent freezes for regulated units happened three times during the de Blasio administration, in 2015, 2016 and 2020.)
This has led to a crisis for older buildings where virtually all the apartments remain rent regulated, which has been detailed by the Furman Center and stories in THE CITY.
Tenant advocates focus on the role of speculators who bought rent-regulated buildings at inflated prices assuming they would raise the rents dramatically over time.
But BronxProGroup’s affordable buildings never saw that kind of speculation and illustrate how the financials of a much broader group of buildings are increasingly untenable.
“They are a great example of a family-owned and operated business who are doing this because they believe we need more affordable housing in the city,” said Carlina Rivera, a former Council member from Lower Manhattan who is now chief executive of the New York State Association for Affordable Housing, which works with for-profit developers. “And they are telling you they are barely breaking even.”
The Enterprise study found that collections for the buildings it studied now equal only 90% of the expected rent, down from about 95% before the pandemic. These buildings were financed with the assumption that collections would be 95%.
“I call them workouts because I can’t afford my expenses and my mortgages even at 95%,” said Magistro. Prior to 2019, she was collecting 98%. This year she is collecting 93% which is higher than in 2022 and 2023.
Both Enterprise and ANHD zeroed in on increases in the cost of insurance, utilities and maintenance as the second major part of the problem.
Magistro’s insurance costs, which have gone up the most in The Bronx where her portfolio is concentrated, have jumped from $600 a unit annually to $1,600 since 2019.
Another key issue for her is paying overtime to staff, in part as a result of changes to trash collection rules that now force building workers to put out the garbage at night.
Both Enterprise and ANHD note that when building finances are strained, landlords have no choice but to defer maintenance, which leads to a deterioration of the housing stock.
Magistro this year laid off 10 staffers reducing her workforce to 143.
One of her buildings shows how the factors undermine a buildings’ finances.
She is collecting only 81% of the possible rent at a 30-unit building at Mapes Avenue in the Bronx, built in 2021. Her insurance has almost doubled since the building opened to $2,500 annually. She will need an infusion of cash to reduce the mortgage if the building is to operate for the long term and avoid default.
“Small projects have little resiliency to economic shocks like a spike in insurance,” she said.
Mayor-elect Mamdani has promised to help landlords reduce their costs to cope with his planned rent freeze. One key target will be reform of the city’s property tax system, which levies the highest taxes on rental buildings.
However, most of the all-affordable projects don’t pay property taxes. And other mayors have tried and failed to make headway on property tax reform, a thorny and complicated issue that needs Albany’s involvement to get done.
He also says he will make changes to the bureaucracy that will help. Magistro notes that when one of her apartments becomes vacant, it takes an average of five months for the city to approve a new tenant if a city subsidy is involved, which costs her lost rent for that period. Eviction of a tenant who is not paying their rent averages 12 to 16 months to conclude, in large part because of the sluggish workings of Housing Court.
ANHD wants the state to establish a fund for forgivable loans to help stabilize the finances of these buildings, increase voucher and other rental assistance programs, have the state intervene in the insurance markets to lower costs and provide new financing to help with rehabilitation programs.
Enterprise also calls for emergency funding, more rental assistance and actions to reduce insurance costs. It also wants sped up leasing for vacancies. Enterprise says in its report that solutions “cannot come on the backs of renters.”
Magistro can’t count on any of that now that property management is at best break-even. So she’s crafted a five-year plan in which her company will seek to increase its role as a developer, using the development fees she receives to keep the company afloat.
And with so much talk about the need to build new housing to solve the city’s housing crisis, she has a plea to Mamdani and other officials about their priorities and how to view landlords like her.
“There was a lot of work in previous decades to create and it is important to remain it stays financially feasible and it is important for the city to keep it affordable and preserved.” she said.
And she added, “Yes I am a developer and a landlord but I see myself as an employer,” she said. “I live in New York City. I choose to be in business in The Bronx. My office is in The Bronx. Seventy percent of the people I employ are from The Bronx. That’s part of the story, too.”
Tripling of insurance costs since 2019?! That’s insane. What are the causes of this? Are insurers paying out huge claims from storms? Is it simply the increasing costs of replacement/repair from greedflation?
I don’t know how much longer our economic charade (depravity and exploitation for the masses, enormous wealth for the few) can continue if people keep facing 3x increases in insurance premiums, utility bills, housing and health insurance.
Probably a lot of reasons for insurance costs going up, but a big one is simply that material costs have gone up significantly in the last few years due to supply chain issues, greater demand (SE Asian and ME construction booms) labour shortages (skilled tradesman are retiring, or dying – and are not being replaced) along with the effects of increased monopolization.
The US economy is a dysfunctional mess due to years of underinvestment and profit taking. Unfortunately there are no easy solutions to this, but our politicians are addicted to easy solutions.
“…but our politicians are addicted to easy solutions.”
How does that happen? Are all politicians addicted to easy solutions? Or is it possible that some are addicted to one set of solutions and some are addicted to another set, and along with sub-sets of each and the need to get something done – or the need to stop progress or re-gress – middling solutions that look easy (and are easy to denigrate) get accomplished?
New York State is trying to find out, because the state hasn’t even collected statistics on how property insurers in the state allocate their funds
IMHO, even if Insurance companies aren’t the largest source of growing costs, understanding how their premiums have increased can help inform what else might be causing housing costs to increase. If it’s increasing disbursement frequencies because of climate change and increasing storm frequency, that’s important to understand. If it’s because claim amounts have increased because of increased material and labor costs due to shortages, that’s important to understand. Because the knock-on effects of increased storms, or increased material and labor costs, is increased repair and maintenance costs
It’s not possible to provide good quality housing to low income people and make a profit, without subsidies. And it’s obviously cheaper for the state to build houses because of cheaper borrowing costs, and economies of scale (which really kick in for mass affordable housing).
There is no market solution to poverty, but obviously that runs counter neoliberal ideology. You run into similar issues with microloans (high interest rates are inevitable, as the administration costs are high).
Thank you. I have told our local city officials wringing their hands about housing costs the exact same thing – you can’t expect private developers to build low cost housing. If the city wants low cost housing, they will need to build it, own it, and maintain it themselves.
As you noted, truly low income housing is subsidized. So, increase the subsidies if necessary to keep up with maintenance – it’s a matter of political will, not lack of resources.
In Seattle there was something called Housing Resources Group which I benefited from. This was not low income housing, but it was working class housing. To live in one of their apartments, you had to show proof of employment with a wage that was large enough to cover the relatively low rent, but not so large that you were overqualified. In other words, they didn’t want rich people taking advantage of the reasonable rents on offer. Seemed like a fair deal to me, designed so that nobody sinks too low or flies to high.
Can you recall the spread? Thanks.
Unfortunately I can’t since it was over 25 years ago. I do remember that the rent for a decent studio was $550.00. I tried to do a search for it, but what looked like the organization’s website registered with two different browsers as an unsafe link.
I lived in two different of their properties over the years, and both were pretty much right in downtown Seattle (First Hill and Capitol Hill for the Emerald City denizens). Downtown, where we now hear in so many cities that there is a “worker shortage”. And yet this group managed to provide working class housing within walking distance of where workers were needed. Imagine that.
Some of us are so old we can remember government built public housing including in my small city. In big cities many of these were considered crime magnets (and blown up) but here perhaps they’ve gone away because a bad vibe for an ambitious real estate promoting metropolis. Plus all that socialized housing was practically Soviet and our Repubs would rather be dead than Red.
Or something.
So blame it all on Robert Moses? Gentrification or highway-fication can be a downer for the poor.
This. There is no market solution to housing for low or even moderate income housing. Capitalists want profit and us poor folk just don’t yield enough, so the housing stock will not be voluntarily constructed. Period. In any ‘Western’ capitalist country. Public ownership can be problematic too, between lack of competence, graft, and the fact that such stock remains a money sink on the public tab which the public resents. Public or public + nonprofit-coordinated construction and nonprofit, diversified ownership and management with restricted covenants but in return ongoing public backstops and coordination are the way to go: build it, than stand aside as long as the stock goes into nonprofit hands with legally defined objectives. I live in Seattle where diverse initiatives have been pursued for over 30 years; never enough, but maybe getting there.
I moved into a Housing Resources Group building 29 years ago, and remain there. The org changed its name to Bellwether Housing at least a dozen years ago, and is very much a going concern. It is a nonprofit that funds itself with muni bonds originally authorized when numerous SROs were torn down to build the Convention Center here. It has bought existing multiunit housing stock, typically in poor condition, refurbished it, and rented it out to the working poor, now having dozens of properties. Residents have to demonstrate proof-of-ability-to-pay. If there was a max income certification, that’s gone now, but most buildings are studio-only so if and when residents get up to lower middle class income level they move out for more space. Units have annual rent increases capped at what are below market levels, and rents generally are ~15-20% below market per the org’s charter, but that’s not saying much. When I moved in, I was paying $295/mo for the equivalent floor plan of my present unit that went to $1276 in September, for which I then received a very substantial low income reduction (for which I manifestly qualify). These are still the cheapest units in town. If those of us here lost a place, there’s nowhere else we could go. Despite that, many can’t afford even these rents, so the org has had to resort to public services placements repeatedly in the last ten years to try to get close to paying occupancy to meet their budget. With mixed results. Some of those folks are transitioning from the streets or otherwise have problematic functioning, leading to more evictions there than are great but those that get bounced haven’t made great neighbors, either, like the occasional drug dealers or the guy who set fire to his unit last year when he went off his meds. Living here is no luxury cruise, lemme tell yah, and turnover has tended to be high when the economy has been at all good, but it is a viable solution for us while and as we call this our current address. We are headed for Hard Times in my view, so I’m holding onto my modest square footage with both hands and all ten toes.
There are 3-4 other similar nonprofit housing providers operating in town, with different origin stories and models. A few have managed to get some new, purpose built, affordable stock raised, like a senior living unit that went up on Capitol Hill this year. This all is the way to go, so that multiple providers can try different mixes of funding, residents, income strata, amenities, and management echelons. No one bad operator can take down the whole system, organizations that are best managed can get as close to thriving as a no-frills, penny poor, sector can manage, and such orgs as launch stay off the public exchequer at a year by year level. . . . It’s not a fraction of what is needed to meet affordable housing demand in one of the most expensive cities in the country. The private sector has not voluntarily put up a low income building in decades in this city, and the ones that were built through developer mandates were deliberately designed to be as repugnant as possible and still get certified for occupation. The voters passed a measure last year to raise money by, in effect, a wealth tax to fund affordable housing construction. Which the dodgy, ‘business friendly,’ mayor here sat on and refused to implement. The same mayor who, y’know, just got prised from office two weeks back by our new SOCIALIST mayor whose max priority is to get affordable housing built by any means necessary, starting with that voter approved funding source. Rural solutions are going to need a different implementation mix because ‘the market’ isn’t going to voluntarily put a roof over the heads that need one there, either, but it can get done. If we can send some flyboys to a sub-planetary satellite body without an atmosphere, we can sureashell build livable housing for the masses, if we get the rich out of the way and their henchpeople out of office.
THIS is the future: abandon the capitalist system and it’s rich man’s market; vote for a place to live; get it built; get management that will keep it from becoming a dumpster fire; live in it; move out and up if that is ever possible. For many of us, ‘up and out’ will never be possible, barring a meteor strike level of synchronicity. But competently run low income housing built outside ‘the market’ is a tolerable way to live one’s life, if we decide to force the market back and make a space to live in.
Thanks for this – glad to know the organization is still running. I lived in one of their smaller buildings near Broadway and Pike which was fine. The one I lived in on First Hill was a nine story building, and was no luxury cruise. I barely spent any time there, mostly just to sleep, and didn’t have much food in the apartment. Yet every time I came home and turned on the light, I would see little six legged friends scurry off into the shadows. I was friends with one of the building managers and she was surprised when I told her the problem. After I moved out, she told me that the guy in the apartment next to me had either died or moved out and when they went in to clean up, there was wall to wall fast food containers all over the place – the guy was no Martha Stewart apparently. So the problem was limited to my vicinity in the building – lucky me.
I sincerely hope the new mayor can make some progress on this front and give some of these housing organizations a boost.
Hard disagree. History proves you wrong. Prior to 1994, when rent regulation was near-universal in NYC, we did not have this problem. Housing was broadly affordable. Then Mario Cuomo opened the door to vacancy deregulation, and here we are.
And from 1947-1963, when the city had strict versions of both residential and commercial rent control, the city was cheap to live in. We are in a crisis because of deregulation and privatization. You are correct that public subsidized housing needs to be part of the mix, and it is true that we stopped building long-term affordable developments like Co-op city. But the numbers show that the biggest impact is from how we treat privately owned apartments.
This. It’s not like this is a secret elsewhere in the world — Singapore and Vienna come to mind.
But neoliberalism means America must remain stupid and self-harming.
5 months to approve a new tenant?? That should be 1 month at most.
The speed, or lack thereof, of government services is infuriating and in this case is good for no one, the tenant nor landlord.
Should be Mamdani’s easiest lift as well.
Ehh. Remember, that’s likely to be the average speed, couple it with some tenants not sending in all the papers and I can easily see a 2-3 month average. Six is a bit much, but getting it down to 1 on average can be a tad optimistic.
Possibly can be helped by making an online application that requires relevant info to be sent in when applying (harder to forget or make add wrong document) – but that’s me talking out of my rear, so YMMV.
State or federal ownership is probably limited. Nixon stopped the feds from building affordable housing, and, as he cut taxes on the top brackets roughly in half, Reagan cut HUD’s affordable housing budget by 75% (and with his successor, raised payroll taxes eightfold). Clinton signed the Faircloth amendment limiting federal affordable housing further.
In addition to public ownership, Steve Keen proposes 0% loans (from the state). Also: all affordable means only poor people live there. Mixed affordable & market rate works better from a social point of view.
An HVAC tradesman friend decries how poor people don’t maintain their all affordable units. But what do you expect? They’re poor because they don’t value material things. Mixed income fares better. Also, building affordable without an adequate maintenance budget is covert sabotage.
I say when everything’s trashed, hand the problem to the lefty!
Meanwhile, the underlying assumption is that the poor deserve their poverty (corollary: the rich deserve their wealth).
Thanks. Perhaps the last poor person leaving NYC should tell the billionaires to turn out the lights. Or tell the billionaires to tell their AI robots to turn out the lights. The human factor doesn’t seem to figure into FIRE calculations.
This piece (pre-election) dives into the rent stabilization board history and context.
https://www.phenomenalworld.org/analysis/stabilization-and-speculation/
It makes two suggestions, summarized in this section:
I would love to know more about the breakdown of expenses. From the article, mortgage payments, insurance, utilities and upkeep are mentioned.
This is remarkable, right? The rate of increase seems too large to be correct, but assuming it is, why?
In general, are the expenses of maintaining an apartment building dominated by economic rents, such as mortgages and insurance, or costs of real maintenance and upkeep?
Ask the mayor of Vienna, Austria what to do to solve the problem.
I will make a prediction that mamdani will not even do bear minimal and cap the rent. The way the guy protect hakeem show that he dont have what it take to cap the rent. People will say they have done it before true but it was under pandemic so there was pressure. They dint do it because they care.He have great policy’s but do he have the heart. I say no
re: “Losing Money Every Month”
NYC tenant attorney here. The remedy under rent stabilization where a building can’t stay afloat is to file a hardship application. The law guarantees an 8% return, but debt service is excluded from the calculation. Absent a discussion of the option of filing a hardship application, and its drawbacks and pitfalls, the article paints a distorted picture.
In my anecdotal experience, the tenant advocates are right: stabilized buildings are over-leveraged. Most have already deregulated a decent percentage of their units prior to 2019, when it was legal. HPD (the code enforcement agency) can repair emergency conditions. One thing the city can do is to provide repairs and loans to pay for them. (And to stop using contractors, as opposed to civil servants, to make the repairs).
This crisis has been a long time in coming. The state should long ago have banned speculative financing of the purchase of buildings with regulated apartments: if the existing rent roll can’t pay the mortgage, the loan should not be permitted.